Do you know what factors affect your car insurance rates? When it comes to calculating your monthly premium costs, insurance companies factor in many things, including your age, marital status, number of miles you drive, and even the vehicle. To learn about some of the factors that can result in increases and decreases to your monthly premiums, keep reading.
1. Where You Park Your Car at Night
The address of where you park your car at night can have an effect on your car insurance rates. If you live in a low-crime area with statistically safe intersections, your car insurance rates will be lower than if you lived in an area of high crime and an intersection known for numerous accidents. Individuals who live in rural areas also tend to pay less per month for insurance than those who live in densely populated areas.
Since you wouldn’t want to move simply to lower your car insurance premiums, it’s important to take advantage of discounts, like multi-line discounts that offer a certain percentage of savings for having two or more policies with the same insurance company.
2. The Make, Model, Year and Type of Your Vehicle
Insurance companies take into consideration your car’s market value and safety statistics when writing your insurance policy. This means that new cars, luxury cars, sports cars, small cars generally have higher insurance premiums than other types of vehicles, and vehicles with safety ratings of one, two and three stars will pay higher insurance rates than vehicles with four and five stars.
While it’s not typically feasible to replace your car based on your insurance premiums, it is a good idea to check the estimated insurance rates for any vehicle you plan to purchase in the future. For example, if you choose a vehicle with good crashworthiness that’s a few years old, you’ll pay lower insurance premiums than if you were to buy a new vehicle that performed badly in crash tests.
3. Your Gender
Insurance companies also consider your age and gender when underwriting your policy. The insurance premiums for men tend to be higher than for women. This is because men are more than twice as likely to get into car crashes than women, according to IIHS. Men also tend to drive more miles and engage in driving behaviors that insurance companies deem risky.
While there is very little you can do to change your gender, you can take a defensive driving course and engage in safe driving practices to lower your personal risk of getting into a car accident.
4. Your Age and Marital Status
Drivers younger than 25 and older than 75 tend to pay more in insurance premiums than drivers between the ages of 25 and 74 because they statistically get into more vehicle crashes. For drivers younger than 25, they are considered to be less experienced than older drivers and more likely to get into auto accidents. For drivers who are 75 years of age or older, vision problems and decreased reflexes may increase their risk for getting into auto accidents. Additionally, drivers, especially males, who are unmarried tend to get into more vehicle crashes than their married counterparts.
Since these two factors can’t be immediately changed by the driver, it’s important to make sure to drive safely and pay attention to the other drivers on the road as well as the road conditions in order to lower the risk of getting into an auto accident.
5. The Number of Miles You Drive
Insurance companies typically consider driving 7,500 miles per year as the average and base insurance rates off of that estimate. It works out to about 144 miles per week. Drivers who drive more than the average tend to pay more in insurance premiums, and drivers who are considered to be low-mileage, pay less. This is because drivers who spend more time on the road are at a greater risk of getting into an accident.
For most drivers, reducing the amount of time they spend on the road isn’t feasible, especially if they have a long commute or a job that requires frequent road travel. However, getting enough sleep, remaining vigilant while driving and taking a defensive driving course may help you reduce your risk of getting into an accident.